The “oldest house in Laguna” will undergo modernization following a controversial 3-2 vote of the City Council on Tuesday despite an hour of passionate discourse mostly opposing the remodeling of the historic $3.2 million beachfront cottage.

The major changes in contention at 154 Pearl Street are the addition of a 1,500-square-foot house to the cottage’s garage as well as changes to the garage’s exterior and the existing 1,600-square-foot residence.

The council’s vote supports the decision of the city’s Design Review Board, which approved the project in October after more than two years of hearings about historical significance and design. The remodel won approval due to the finding that the house originally built in 1883 had already undergone multiple additions while occupied by the Harper family until the 1940s. Those and subsequent changes, according to the council’s vote, undercut requirements by the current owner to strictly adhere to the building’s original historical features.

The Pearl Street cottage is “the mother of all historical resources in this area,” Vonn Marie May, a San Diego historical consultant, told the council. Historical status is conferred on some buildings if the builder, owner or occupant is considered historically important. Thomas Harper, whose family owned the property for six decades, was a local architect who worked on several residences regarded as Laguna treasures.

“I’m disappointed we are going to lose so much of the element of the house that is the oldest cottage in Laguna,” said Mayor Toni Iseman, who, along with council member Verna Rollinger, opposed the project. “I think we need to do a better job of who’s who in terms of whether somebody’s important or not. If we can overlook Harper, who knows who else we can overlook.”

The oceanfront lot was purchased for $3.2 million in 2008 by Ken Fischbeck of Tresor Properties, which has acquired several oceanfront properties for home construction and resale. Fischbeck said he plans to continue to live there with his wife Lynda after the property’s been upgraded.

After hearing public testimony on both sides, Iseman asked preservation advocate Ann Christoph, who appealed the Design Review Board’s decision to the council, for a solution that would preserve the home’s historical value. “The house needs work. It really does,” said Iseman.

“We think there is a solution to make the house livable without doing major destruction of so much of the existing building,” said Christoph, adding that the new design jeopardizes the house’s historic rating as well as its qualification for a property-tax reduction for historic properties under the state’s Mills Act. She suggested maintaining the house’s current exterior to preserve its historic status. If the façade is not re-created, “it’s not preservation, it’s replacement and we lose that historic character,” she said.

“We’re probably not going to get an E-rating,” Fischbeck conceded in a later interview, referring to the highest rating for historical significance. The developer, who’s refurbished other historic properties and qualified for Mills Act benefits, envisions renovating the town’s oldest house to ecologically sustainable standards. “For a house that should probably be torn down, that was my goal from the beginning,” he said.

Resident Barbara Hoag questioned why Fishbeck would not strive for “historical beauty” rather than press for a remodel that further compromises an historic asset. “That’s why you buy a historical house,” she said.

One answer came from Neno Grguric, a structural engineer hired by Fischbeck, who crawled under the cottage to check its foundation and found none. “Right now the walls are sitting just on wood plates,” he said. “There’s no retaining walls in the back on the lower level towards PCH and the studs are pretty much leaning up against the dirt.”

Council members Jane Egly, Kelly Boyd and Elizabeth Pearson supported the remodel. “I, quite frankly, am not as impressed with that building as some of you are,” said Egly. “It looks like a patchwork and you can’t stand up in most of the rooms anyway.”

Both Rollinger and Iseman said the project revealed flaws in the city’s historic assessment process and the necessity of hiring third-party historic preservation experts rather than relying on experts hired by property owners.